Race Day Live A 27-year-old man from Honduras, Jose Molina-Herrera, has been sentenced to 27 months in federal prison. He was charged with conspiracy to commit wire fraud and defraud the United States.
The case involves a $14 million payroll scheme in Florida that led to significant losses for the IRS and an insurance company.
He has also been ordered to pay $3,558,579.42 in restitution to the IRS and forfeit $867,005 in illegal proceeds. Molina-Herrera pleaded guilty on November 1, 2024.
From 2019 to 2020, Molina-Herrera and others created a scheme to pay construction workers “off the books.”
This helped contractors avoid paying workers’ compensation insurance and payroll taxes. Molina-Herrera ran a shell company called All National Remodeling LLC in Orlando. The company provided fake liability insurance certificates and handled cash payments for workers.
Contractors paid 6% to 8% of their payroll to Molina-Herrera’s team. In return, they received fake insurance documents, which claimed that their workers were covered.
However, these policies were based on false applications and did not cover the workers. Because of this, the insurance company lost over $2.2 million.
The scheme also avoided payroll taxes. The contractors deposited checks into the shell company’s accounts.
The money was withdrawn as cash and paid to workers without deducting taxes.
This arrangement helped contractors avoid legal responsibilities, including ensuring workers had authorization to work in the U.S. Overall, the scheme resulted in $14 million in untaxed payroll, causing the U.S. Treasury to lose $3.5 million.
One of Molina-Herrera’s partners, Oscar Molina-Avila, has already been sentenced to 52 months in prison for his involvement.
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Officials have condemned the scheme. Ron Loecker from IRS-Criminal Investigation stated that such actions hurt law-abiding businesses by creating unfair competition. Tim Hemker, a Homeland Security official, emphasized the harm to the economy and legal employment systems.
The investigation was conducted by the IRS-Criminal Investigation, Homeland Security Investigations, and Florida’s Bureau of Insurance Fraud. The case was prosecuted by Assistant U.S. Attorney Michael J. Coolican.
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